27 May 2018

Airbnb is one of many examples of the “sharing economy” — connecting buyers (users) and sellers (providers) through a facilitator that usually operates an app or a website. Airbnb acts as this facilitator by allowing individuals, referred to as “hosts”, to rent out a room of their house or their whole house for a short-time basis via its online platforms.

While the focus here is on Airbnb, the tax concepts outlined could be applied in a more general sense to anyone seeking to rent out a part of their home, whether through Gumtree, Realestate.com.au, Flatmates.com.au and so on.

The tax issues raised relate to hosts who:

• own their own home;
• live in it full time; and
• want to generate some dollars by putting up an identifiable area of their home for rent.

As a host, the three major tax considerations that you need to be aware of are rental income, rental expenses, and capital gains tax.

Continue reading “Dealing with tax and renting via Airbnb” →

10 May 2018

Duties and taxes when you buy online from overseas

Items that you buy over the internet from an overseas source are generally required to abide by the same rules and screening processes that apply to any other “import”. Also the usual duties or taxes should apply.

Customs duties are regulated by the Department of Home Affairs (a recently formed body from December 2017, which now oversees the Australian Customs Service as well as Immigration and Border Protection).

Relevant facts to keep in mind include:

• For goods that are worth $1,000 or less, there are at the present time no duties, taxes or charges to pay (however see below*).
• For goods that are worth more than $1,000, you are generally required to fill out a special form called an Import Declaration, and pay duties, taxes and charges.
• You will need to pay duties and taxes on some goods (like tobacco or alcohol) regardless of their value.
• Certain types of goods are not allowed to be brought into Australia, such as firearms, or else need special permits.

The Department of Home Affairs may screen, x-ray or examine your goods just like any other imported items to make sure the goods are allowed into Australia. The Department of Agriculture may also need to clear and inspect items before they can be delivered to you.

Continue reading “Duties and taxes when you buy online from overseas” →

 14 May 2018

By Ashleigh Donaldson – Senior Accountant at i2 advisory

HELP Debt Recovery from Non-resident Australians

If you have a HELP (Higher Education Loan Program) debt, from 1 July 2017, should you choose to pack your bags and intend to, or have already relocated overseas for more than 183 days in a 12-month period you must notify the Australian Taxation Office.

With what was estimated as $20-$30 million each year lost due to graduates moving overseas, the government is no longer prepared to foot the bill for your education should you choose to ditch Australia and chase the sun or snow overseas. For years it’s been known that should you relocate overseas with the view to never return it’s very likely your HELP debt would never catch up with you, I mean how could it? You’re no longer an Australian resident for tax purposes and based on the previous criteria, you were under no obligation to make any repayments…. Hallelujah! Continue reading “Have a HELP Debt? Leaving Australia? Worth a read” →

12 March 2018

Below is a list of tips from the Australian Taxation Office (ATO) that should help rental property owners avoid what it has found are the 10 most common tax errors made by rental property investors. The ATO says that avoiding these tax mistakes will save many taxpayers both time and money.
Continue reading “Top 10 Tips for Rental Property Owners to Avoid Common Tax Mistakes” →

12 March 2018

March 31 and the end of the FBT year is around the corner, so to help taxpayers get things right, the ATO has made public the fringe benefits tax issues that attract its attention.

Broadly (not just in relation to FBT), the ATO says the following behaviours and characteristics tend to raise a red flag:

• tax or economic performance not comparable to similar businesses
• low transparency of tax affairs
• large, one-off or unusual transactions, including transfer or shifting of wealth
• tax outcomes inconsistent with the intent of tax law
• lifestyle not supported by after-tax income
• accessing business assets for tax-free private use
• poor governance and risk-management systems.

Continue reading “ATO Spells Out Its Big FBT Concerns” →

12 March 2018

Legislation that came into law in the last half of 2017 makes certain measures first announced with the 2017 Federal Budget now a reality.

The “housing tax integrity” bill solidifies the government’s intention to deny all travel deductions relating to inspecting, maintaining, or collecting rent for a residential investment property. As well, second-hand plant and equipment that came with an investment property are now off the table as far as depreciation goes.

The measures will apply from July 1, 2017, so will affect returns for the current financial year. However the changes to depreciation are dependent on when assets were purchased (more below).

Continue reading “Rental Property Owners Lose Some Deductions” →

12 March 2018

Single Touch Payroll is a government initiative to streamline business reporting obligations, which is due to become compulsory from 1 July 2018. When a business pays its employees, the payroll information will be sent to the ATO via the business’s payroll software.

Reporting under the Single Touch Payroll (STP) system removes the requirement to issue payment summaries, provide annual reports and tax file number declarations to the ATO. During the first year of its introduction, the ATO says employers will not be liable for a penalty for a late STP report.

Continue reading “Is your business prepared for Single Touch Payroll?” →

12 February 2018

You can now use your super to save for a deposit on a home and potentially save some money – by using the First Home Saver Super Scheme (FHSSS).

This blog post by Matthew Reid, Senior Accountant at i2 advisory gives an introduction and example of using the FHSSS.

Welcome to our first i2 advisory blog starting this 2018 year. We will be looking to roll out these informal and light-reading blogs on a regular basis to share tips and insights into a number of matters that may impact your business, personal/family finances and potential tax savings.

For many of us millennials, this new year (apart from starting a bit hazy) may have begun with some fresh new goals in mind for the year ahead. If, like me, the goal to knuckle down and save for that all important home deposit is on your to-do list (of perhaps you’re a parent who wants to enjoy an emptier nest), then this will hopefully take you in the right direction! The thought of saving up for a first home, at least to me, can be quite intimidating. Prioritising home deposit saving over spending can be a difficult mind shift, especially when the lure of overseas travel or a better car is always in the background. In addition, media speculation about the trend that the housing market is getting further and further out of reach and conjecture over what interest rates will do adds to the confusion and anxiety about when and how to break into the market. Fortunately, there has recently been some relief for us ‘young ones’ hoping to break out and possibly get into home ownership sooner, and it doesn’t have to involve 24 hour monitoring of the cryptocurrency movement.

Continue reading “Saving up for your first home? This strategy may help.” →